Brazil’s loss, China’s leverage: The hidden cost of Trump’s trade war

The moment US President Donald Trump imposes a 50 percent tariff on Brazilian exports—a move he has repeatedly threatened—is the moment China’s diplomatic and commercial machinery will surge into action. From iron ore to agriculture, venture capital to statecraft, Beijing will be positioned to exploit the disruption to secure resources, strengthen its sway in Latin America, and potentially reap gains in the US itself through carefully designed circumventions. The possibilities are many; the only uncertainty is whether China will act with its characteristic blend of patience and precision.

As an article published by The Diplomat puts it, the first opportunity lies in commodities. Brazilian oil and semi-finished steel will suddenly lose competitiveness in the US market, prompting traders to seek alternative buyers. Chinese giants like Sinopec, PetroChina, and CNOOC can rapidly move to sign multi-year supply deals with Petrobras, capitalising on Brazil’s urgent need to redirect exports. The same applies to Vale’s iron-ore pellets and slabs from Usiminas, which Chinese steelmakers can mix with domestic supply to improve quality while lowering costs. These discounted deals would shield China’s refiners and mills from domestic market swings and reduce their exposure to potential sanctions elsewhere.

Agriculture would bring a second windfall. Brazil’s soybeans and corn already enjoy a strong presence in the Chinese market, but a US-Brazil trade rupture could push even more shipments toward China. State-run firms like COFCO and Sinograin would gain the upper hand in setting shipping terms and payment conditions, while Brazilian growers still earn solid returns by dodging US import taxes. Meat, fruit juice, poultry, and even gourmet coffee could follow this path, elevating China’s role as the primary gatekeeper of Brazilian agricultural earnings.

A third area of gain is capital and infrastructure. With export routes in flux, the article argues that Brazil would need to build out ports, railways, and logistics hubs, especially in its less-developed North and Northeast. Chinese lenders and builders—such as the China Railway Construction Corporation—could step in with low-interest loans and turnkey construction packages, filling the vacuum left by risk-averse Western financiers. These investments wouldn’t just improve China’s access to raw materials; they would also reinforce the Belt and Road Initiative’s message of connectivity, just as Washington doubles down on protectionism.

At the tech level, Chinese firms could erode the dominance of American platforms. If Brazil retaliates by scrutinizing US tech companies like Amazon or Google, alternatives such as Alibaba’s e-commerce services, Tencent’s payment tools, and Huawei’s cloud platforms could offer themselves as politically safer options. These firms already operate data centers in São Paulo and Rio, and a potential US pullback would grant them even more dominance in Latin America’s top digital economy.

China could also press its advantage through financial diplomacy. The China Development Bank could pair infrastructure loans with renminbi settlement lines, nudging Brazilian exporters to bill in yuan rather than dollars. Each such contract weakens the dollar’s grip on South-South commerce and bolsters the renminbi’s role in international trade—one of Beijing’s core long-term ambitions.

On the geopolitical stage, the publication points out that the rewards are twofold. Within the BRICS group, China could cast itself as the dependable ally that absorbs Brazilian exports during times of US hostility. Beyond BRICS, it could take its case to the World Trade Organization and the G20, arguing that unilateral US tariffs once again destabilize global trade norms. This narrative of principled opposition advances China’s interests: by visibly siding with Brazil, it undercuts Washington’s leadership in the Global South.

If Brazil chooses a restrained response—private diplomacy, backroom lobbying, quiet concessions—China’s leverage will shrink but not disappear. It will still gain ground by acting as a crucial alternative market. If Brazil chooses public retaliation, the benefit to China grows, potentially positioning it as a key broker in future trade disputes. Either path leaves China uniquely poised to benefit from a rival superpower’s overreach—without lifting a finger in conflict.

By Nazrin Sadigova